• by Kerry Beutel , Anneli Werner , August 2, 2022

Creative services are a highly fragmented industry with many players, big and small, all vying for the same business. It’s why so many agencies are considering merging two (or more) powerhouse companies together to expand services offerings and pump up creative marketing talent. But an acquisition can quickly go sideways without proper planning before signing the deal. And just as importantly, strategic thinking post-close is essential to ensure the two companies successfully integrate as one.

When WHITE64 began the process to grow its digital marketing practice, we developed a gameplan to find the right partner and we joined forces with the Jake Group, a specialist in bespoke website design and development. If your agency is thinking about jumping into the M&A game, here are 6 tips to consider before taking the plunge:

1. Know What You Want -- And What You Don’t. Before you entertain a merger or acquisition, establish clear goals – what do you need/want to get out of the partnership? Then identify your “dealbreakers” – what are the key components of a deal that are non-negotiable? Having a clear set of criteria can help you objectively evaluate and compare potential partners and deal structures without getting distracted by other interesting, but perhaps not as important, factors. 

2. Date First. The initial excitement of a potential partnership can create a flurry of activity right off the bat, but it’s important that both agencies take the necessary time to get to know each other. Before imagining a future together, date first. Figure out how much you have in common. Come to understand if your values align. Compare histories and understand what drives your success. This approach will allow your team to get comfortable with the people around the table, which will ultimately make for a true partnership of equals and friends. 

3. Ease into Culture Change.Naturally, bottom-line financials are core components for a successful acquisition, but just as critical are the people. While the pandemic taught many of us to be nimble and expect major shifts at a moment’s notice, a merger of two agencies can prompt major culture shock. Instead of changing the rules overnight, encourage both agencies to ease into the new relationship over time. An easy-does-it adjustment period allows team members to acclimate to new faces, an unfamiliar office environment, and, of course, different ways of doing business. 

4. Be Prepared & Tidy Up. Before beginning the exploration process, it’s essential that both agencies get their houses in order which establishes a foundation for a successful merger. Both sides should ensure their financials are clearly documented and accurate to streamline the due diligence process. It also helps to have an organized collection of spreadsheets and list of requirements that makes exchanging paperwork less tedious and easy to track. This will help both companies remain on point and organized from start to finish and can ultimately expedite the close. 

5. Supercharge Communication.Effective, transparent, and repetitive communication sits at the center of nearly all successful agency mergers. It seems fairly obvious to reach out to employees, clients, and friends once the transaction is nearly official, but a well-executed communications plan can easily fall by the wayside after the kinetic pace of closing the deal itself. To avoid speculation or, worse, confusion and disruption, develop a multi-channel communications plan weeks before the partnership is official. Share the news with employees in a way that unifies different parts of the joint company. Develop a list of clients who should learn about the merger directly from a trusted contact. Promote the acquisition through email marketing, social media, and traditional PR. The list goes on. But whatever you do, communicate often, be consistent, and stay honest. 

6. Go With Your Gut.Most business partnerships come with inherent risk, but we’d like to think the old adage is true -- as highly creative people, agency leaders are risk-takers, yet know instinctively how to make decisions. For us, both firms poured over requested data, reports, and files during a thorough due diligence audit.  But in the end, we relied just as heavily on a gut check before joining forces as one. After all, intuition is creatives’ superpower! 

Working through an acquisition of any size can be a significant undertaking, but with a well-conceived plan and dedicated team at the helm, a merger of two creative agencies is an exciting time full of positive change and opportunity for everyone involved.